Cost pressures, hybrid work models, and the need to keep up with employee expectations are just some of the factors shaping the way organisations attract and retain talent. So, the HR function, which has always been integral to the success of organisations, is now more important than ever. The environment demands that HR processes transform – to better align people strategy and technology with business goals and to factor agility into HR service delivery – to give organisations a competitive edge.
While startups operating in this space are aiding this transformation, not all new providers of human resource solutions will survive this uncertain economic climate. Experienced recruitment professionals must, therefore, not only find the best fit for their requirements but also ensure that the HR Tech organisations they partner with will stand the test of time.
Also read: Funding Deals Fuelling HR Tech’s Rise In India; What’s in Store For the Sector?
Finding the right fit
While recruiting tools are becoming more sophisticated, how well HR Tech works for your organisation will depend on your choice of software and systems. As independent CHRO Mohit Bhatia, who has previously worked for Mahindra Holidays, Citigroup and Johnson & Johnson points out, “What we need to look at [while choosing recruiting tools] are two things, people and technology, with a focus on outcomes.” Pointing out that there’s no point in introducing a tool “just for the sake of introducing a recruitment tool, or because say, others in the industry are using it,” Bhatia recommends conducting an audit of all HR functions to understand what’s required to improve processes and performance and then to opt for tools that will help meet these goals.
Offering, by way of example, the need to source and hone talent from within as a key priority for leading organisations, Bhatia says that an HR Tech tool that facilitates this function would certainly get his attention. “An audit may reveal many requirements and would, thus, point you to what solutions you really need. For example, if attrition at an organisation is high, then you may want to look for a tool that could help you track the employee lifecycle, from womb to tomb, so that you can understand and analyse this. Depending on what you discover, you may then want to explore the idea of using tools that can help improve work culture, for example, or adopt HR Tech to help you develop a better training programme for individuals,” says Bhatia, adding that organisations may also choose to invest in learning experience platforms which impact employee experience by encouraging lifelong learning.
According to the Price Waterhouse Cooper’s 2022 HR Tech survey, top challenges for HR teams in relation to human capital include, in addition to recruiting and retaining talent, gathering and using HR insights and data analytics, employee upskilling, improving self-service systems and improving on the delivery and adoption of diversity, inclusion and equity policies. But it’s not enough to adopt HR Tech tools to address these. “Integration and implementation of these tools are just as important,” says Bhatia.
Also read: Assessment-focused HR Tech Companies Attract VC Money and Strategic Buyers
“An audit may reveal many requirements and would, thus, point you to what solutions you really need. For example, if attrition at an organisation is high, then you may want to look for a tool that could help you track the employee lifecycle, from womb to tomb, so that you can understand and analyse this. – Mohit Bhatia, Independent CHRO
Shifting core HR applications to the cloud can help get the right data and data analytics before recruiters. However, according to the PwC survey, the technology would see greater adoption if HR Tech companies addressed the security and skills challenges associated with it. According to PwC, over 21% of HR leaders cited concerns over the security of critical HR data stored on the cloud as a top technology challenge.
Bhatia also highlights the importance of elements like an exemplary user interface. “HR leaders must consider whether using this technological tool will improve morale; are the dashboards attractive and intuitive? Ease of operation is also very important.”
Employee experience is a top priority
“Indeed, ease of implementation and adoption of the technology is an important factor”, says Ruhie Pande, Chief Human Resources Officer at Godrej Capital. The HR Chatbot the Godrej Group uses has been developed internally because the capability existed with their Technology team and the HR team felt this was the best way to respond to the real needs of the organisation, and to do so in the style and lingua franca of the Godrej Capital team. Along the same lines, the Performance Management process is run via a completely automated tool that works seamlessly alongside the organisation’s enterprise resource planning (ERP) tool.
“The PMS tool we use ensures that the entire process is paperless, is less labour intensive and enables a meaningful, evidence-based evaluation of performance. The tool thus enables the employee and their manager to focus more on the plan of action necessary to ensure that goals and targets are met or even exceeded. Not only does the PMS tool help maintain the rigour of frequent reviews and feedback in the form of quarterly, half-yearly and annual reviews, but it also enables the measurement of softer aspects like how our people measure up to our company’s values and purpose. This has been a great culture enabler for us,” says Pande.
Also read: 7 Benefits of Automating Employee Performance Management
The PMS tool we use ensures that the entire process is paperless, is less labour intensive and enables a meaningful, evidence-based evaluation of performance. The tool thus enables the employee and their manager to focus more on the plan of action necessary to ensure that goals and targets are met or even exceeded. – Ruhie Pande, CHRO at Godrej Capital
What’s the snag in HR Tech automation?
As market research firm Sapient Insights’ annual survey of HR leaders at small, medium and large organisations, revealed, nearly all organisations continue to struggle to manage such technology. The 25th Annual Sapient Insights HR Systems Survey highlighted some serious issues among organisations and vendors: For instance, there was a 30% increase in respondents saying that a reporting functionality gap exists; vendor satisfaction dropped dramatically in learning, analytics and compensation apps, and user experience satisfaction with HR solutions dropped to a dismal 7%.
Indeed, while the HR Tech sector is growing rapidly – according to Fortune Business Insights, the global Human Resource (HR) technology market size was valued at USD 22.90 billion in 2021, is projected to reach a valuation of USD 23.98 billion by 2022 and USD 39.90 billion by 2029 – a study by HR advisory and research firm Josh Bersin Co. found that a whopping 42% of respondents rated their HR technology implementations as having failed or not been fully successful two years after installation. For the purposes of the study, which took into account the responses of 700 global HR professionals and qualitative interviews with more than 20 company leaders, failure was defined as most employees refusing to use the new HR platform or seeing little benefit in its features or functions.
Also read: HR tech to Work tech: What is Changing?
The Sapient report also found that HR leaders need to rethink their role within the enterprise in the next three years: only 46% of survey respondents said HR is viewed as contributing strategic value. Stacey Harris, chief research officer for market research firm Sapient Insights says, “If we want to get to 55% by 2025, we need to shift from a best-practice function to a defined-outcomes business”. Bhatia agrees. “I think, going forward, one of the recruitment trends we’ll see in 2023 is that recruiters will not remain order takers,” he says. “Today, a recruiter is generally seen as a paper pusher; someone who posts requirements on social media and receives CVs and so on; he is not screening candidates or really getting involved with the processes – and I think this is set to change. I see recruiters moving up the value chain and the role evolving to a more creative, complex job in the ecosystem.”
Currently, the decisions to deploy AI and machine learning are made in departments other than HR. Widening the role of these professionals in selecting, deploying and integrating HR Tech tools is one way to boost the adoption of these technologies. This is especially important as employees have grown change-averse and require encouragement to embrace new ideas and technologies. In 2016, the Gartner Workforce Change Survey showed that 74% of employees were willing to change work behaviours to support organisational changes, but that number dropped to 38% in 2022.
Currently, the decisions to deploy AI and machine learning are made in departments other than HR. Widening the role of these professionals in selecting, deploying and integrating HR Tech tools is one way to boost the adoption of these technologies.
Sustainability, cost and function are key considerations
Another challenge is the uncertainty in the macroeconomic environment. The HR Tech sector has attracted funding in the last years, primarily due to the pandemic-promoted shift to remote and hybrid work models. But turbulence in the economy may also see HR Tech companies folding. Vijay Shitole, CHRO, MEP Infrastructure Developers Inc, says that one way to estimate a startup’s staying power is to see whether it has the right talent on the board. “A person with 30 years of experience may not necessarily spell longevity for the enterprise; in addition to domain knowledge, it’s important to get a sense of how passionate the [Hr Tech startup] founders are about what they’re doing,” says Shitole.
Bhatia, who is very optimistic about the potential of chatbots like amara.ai, says it’s important, additionally, to study whether the startup has received funding, and who from and whether the department heads see eye-to-eye. “In an area like HR Tech, I would also be reassured by the presence of an HR expert on the founding team. If someone who has served as CHRO for leading organisations has invested in such a startup, for example, I would certainly consider it or try it out,” Bhatia adds.
Additionally, as Sapient’s Voice of Customer, Vendor Satisfaction and User Experience Charts in its 2022-2023 survey show, the top reasons cited for low vendor satisfaction and user experience are cost, lack of communication, difficult use, poor customer service and lack of mobile tools. Some of the things recruiters are looking for are, therefore, better responsiveness, intuitive user experience, faster reporting, a single location for tools and data and strong user communities.
Also read: Top 6 Assessment Tools in India for Recruiting and How They Help
“A person with 30 years of experience may not necessarily spell longevity for the enterprise; in addition to domain knowledge, it’s important to get a sense of how passionate the [Hr Tech startup] founders are about what they’re doing
– Vijay Shitole, CHRO, MEP Infrastructure Developers Inc
HR Tech companies monitor these trends and experts believe that even with the sector likely to be hit by cost cuts, it will continue to see innovations in areas such as video interviewing, skills assessment and so on. This is great news for recruitment heads, provided they can pick the right tools and leverage the technology to truly transform the way their organisations operate.
